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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 14716 / November 9, 1995
SEC v. MICHAEL MONUS, PATRICK FINN, JOHN ANDERSON AND JEFFREY
WALLEY, Case No. 4:95 CV 975, (N.D. OH, filed May 2, 1995)
The Securities and Exchange Commission announced that an
Order of Permanent Injunction was entered against Michael
Monus on November 2, 1995, by the Honorable Kathleen
O'Malley, District Court Judge for the Northern District of
Ohio. The Order also bars Monus from serving as an officer
or director of a public company. Additionally, the Order
leaves open the issue of determining the appropriate amount,
if any, of disgorgement, prejudgment interest and civil
penalties to be imposed. Monus is the former President and
Chief Operating Officer of Phar-Mor, Inc.
Previously, on May 2, 1995, the Commission filed a complaint
against Monus, as well as Patrick Finn, Jeffrey Walley and
John Anderson, alleging violations of the antifraud
provisions of the securities laws. The Complaint alleged
that from at least 1987 through 1992, Monus, Finn and
Anderson, and, beginning in July 1990, Walley, while
employed at Phar-Mor, engaged in a fraudulent scheme in
which they falsified Phar-Mor's books, records and financial
statements in order to artificially increase corporate
profits. As a result of the defendants' fraudulent
activities, from fiscal year 1987 through 1991, Phar-Mor
cumulatively overstated income by $290 million. (In fiscal
year 1992, the year in which the fraud was detected, Phar-
Mor overstated income by approximately $238 million.)
Further, the complaint alleged, false financial statements
and records concealed Phar-Mor's growing financial problems
and, during the course of the fraudulent scheme, induced
investors to invest over $500 million in Phar-Mor.